Consumer and Producer Surplus
94 questions· page 1 of 10
The diagram represents the market for a good.
Which statement is correct?
Options
A OX represents the price above which no producer wishes to stay in the market.
B OZ represents the minimum price consumers are prepared to pay.
C PYZ represents the total consumer surplus.
D XYZ represents the total producer surplus.
The diagram shows the demand for and supply of a product.
Which area shows producer surplus?
Options
A area A on Fig. 10.1
B area B on Fig. 10.1
C area C on Fig. 10.1
D area D on Fig. 10.1
An increase in which variable will always lead to an increase in the consumer surplus?
Options
A cost of production
B maximum price
C minimum price
D subsidy
The diagram shows the market for computers in a country.
Which area represents consumer surplus?
Options
A WYX
B XYO
C WYO
D OYZ
Assuming normal demand and supply for a product, what will definitely increase consumer surplus?
Options
A a shift in the demand curve to the left
B a shift in the demand curve to the right
C a shift in the supply curve to the left
D a shift in the supply curve to the right
An indirect tax is imposed on a product.
What is the change in consumer surplus?
Options
A UWY
B UVZ
C ZVWY
D ZVXY
What is consumer surplus?
Options
A the amount of a consumer’s income less the amount paid in income tax
B the amount of a consumer’s income less the amount paid for goods and services
C the amount of a consumer’s income received in bonuses and overtime pay
D the amount a consumer is willing to pay for a product less the amount actually paid
The diagram shows the effect of a government removing the tariff on imports of rice into its country.
How would the removal of this tariff affect the consumer surplus and the government's revenue?
Options
| consumer surplus | government revenue | |
|---|---|---|
| A | increases by VUT | decreases by WVTX |
| B | increases by VUT | decreases by WVQ3Q2 |
| C | increases by P1VUP2 | decreases by WVTX |
| D | increases by P1VUP2 | decreases by WVQ3Q2 |
The market for good X is in equilibrium when its price is $10. The government decides to set a maximum price for good X.
Which maximum price will cause the largest change in consumer surplus?
Options
| maximum price for good X ($) | |
|---|---|
| A | 9 |
| B | 10 |
| C | 11 |
| D | 12 |
In the diagram, D and S represent the initial demand and supply conditions for a good.
Which row correctly represents the change in consumer surplus and producer surplus if supply shifts to S1?
Options
| consumer surplus | producer surplus | |
|---|---|---|
| A | increases by U | increases by S + T + U |
| B | falls by S + T | falls by W + X |
| C | falls from S + T + U | falls by Y + Z |
| D | falls to R | falls to S + V |